Jack Wall (Kildare South, Labour)
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Question 258: To ask the Minister for Finance if tax relief was given by his Department on the purchase of sugar beet contracts in 2001; if recognition was given by his Department that farmers own the national beet quota; and if he will make a statement on the matter. [4541/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Minister of Agriculture and Food that under the EU sugar regime, which comes within the remit of that Minister, each member state has a quota for manufactured sugar. There is no quota for sugar beet nor is there a quota at farm level. The EU regulations stipulate that the quota must be made available to the sugar manufacturing enterprises in the member state. Accordingly, in Ireland the entire sugar quota is processed by Irish Sugar Limited, which is the only sugar manufacturer here. Irish Sugar Limited places annual contracts with farmers to grow a specific tonnage of sugar beet sufficient to manufacture the sugar quota.

I understand that in 2000 an arrangement was put in place by Irish Sugar Limited and the Irish Farmers Association, whereby a grower who was offered a beet growing contract for the 2000 to 2001 growing season could nominate another grower to take the contract subject to the agreement of Irish Sugar Limited. I have been advised by the Revenue Commissioners that any payments between growers in respect of such nominations were payments of a revenue nature in the hands of the payer, and, as such, are eligible to be deducted in calculating the payer's income for tax purposes in the basis period in which the payment is written off in the payer's accounts. The payments were capital receipts in the hands of the recipient and chargeable to capital gains tax.

It should be understood that any such payments were unrelated to quota, since there is no quota for sugar beet nor is there a quota at farm level, but were private arrangements between individual growers in respect of nominations for sugar beet growing contracts.